Investment analysis of the common stocks of selected California banks. - Page 44 |
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31
c e r t i f i c a t e s r e t u r n e d b e t t e r e a r n i n g s t h a n t h e m a rk e t
a n t i c i p a t e d * As a r e s u l t , by J u l y , 1 9 4 3 , t h e S t a n d a r d
and P o o r Ts in d e x o f b an k s t o c k p r i c e s r o s e t o 97* The
in d e x r o s e s t e a d i l y t o 135 i n A u g u s t, 1 9 4 5 , and w i t h t h e
end o f t h e w ar i t s t a r t e d a downward t r e n d t o 8 8 i n 1949•
S in c e 1949 t h e in d e x h a s b e e n s t e a d i l y r i s i n g * S t a r t i n g
i n 1950 w i t h t h e K o re an c o n f l i c t , t h e in d e x r o s e c l o s e t o
100 p e r c e n t from t h e 1949 low* I t was 175 i n A ugust o f
1955 and h a s b e e n f l u c t u a t i n g j u s t b elo w t h i s f i g u r e e v e r
s i n c e t h a t tim e t o May, 1956*
j From t h e s e r e s u l t s , i t i s a p p a r e n t t h a t bank
| s t o c k s a r e n o t f r e e from p r i c e f l u c t u a t i o n s * B ecau se o f
| t h e w ide f l u c t u a t i o n s i n m a rk e t p r i c e s o f bank s t o c k s ,
<1I
many i n v e s t o r s a v o id e d them a s a n in v e s t m e n t m e d ia . When
1I
b a n k s t o c k s w ere b o u g h t , f o r t h e m ost p a r t i t was t h e
j s t o c k s o f l a r g e M e t r o p o l i t a n Hew York C i t y b a n k s w h ich
I w ere p u rc h a s e d * From 1946 t o 1950 bank s t o c k s became
u n p o p u la r and t h e b a n k in g i n d u s t r y d e v e lo p e d a r e p u t a t i o n
1 a s b e i n g a d e p r e s s e d i n d u s t r y . T h is was b a s e d on t h e
t1
g e n e r a l l y a c c e p t e d a s s u m p tio n t h a t bank s t o c k s a r e o n ly
j c o n s e r v a t i v e i n v e s t m e n t s and a r e n o t t o be p u r c h a s e d f o r
i
grow th* The r e p u t a t i o n o f l a c k o f dynamic g ro w th some-
| t i m e s can l e a d t o good b u y in g o p p o r t u n i t i e s i n bank
Object Description
Description
| Title | Investment analysis of the common stocks of selected California banks. - Page 44 |
| Repository email | cisadmin@lib.usc.edu |
| Full text | 31 c e r t i f i c a t e s r e t u r n e d b e t t e r e a r n i n g s t h a n t h e m a rk e t a n t i c i p a t e d * As a r e s u l t , by J u l y , 1 9 4 3 , t h e S t a n d a r d and P o o r Ts in d e x o f b an k s t o c k p r i c e s r o s e t o 97* The in d e x r o s e s t e a d i l y t o 135 i n A u g u s t, 1 9 4 5 , and w i t h t h e end o f t h e w ar i t s t a r t e d a downward t r e n d t o 8 8 i n 1949• S in c e 1949 t h e in d e x h a s b e e n s t e a d i l y r i s i n g * S t a r t i n g i n 1950 w i t h t h e K o re an c o n f l i c t , t h e in d e x r o s e c l o s e t o 100 p e r c e n t from t h e 1949 low* I t was 175 i n A ugust o f 1955 and h a s b e e n f l u c t u a t i n g j u s t b elo w t h i s f i g u r e e v e r s i n c e t h a t tim e t o May, 1956* j From t h e s e r e s u l t s , i t i s a p p a r e n t t h a t bank | s t o c k s a r e n o t f r e e from p r i c e f l u c t u a t i o n s * B ecau se o f | t h e w ide f l u c t u a t i o n s i n m a rk e t p r i c e s o f bank s t o c k s , <1I many i n v e s t o r s a v o id e d them a s a n in v e s t m e n t m e d ia . When 1I b a n k s t o c k s w ere b o u g h t , f o r t h e m ost p a r t i t was t h e j s t o c k s o f l a r g e M e t r o p o l i t a n Hew York C i t y b a n k s w h ich I w ere p u rc h a s e d * From 1946 t o 1950 bank s t o c k s became u n p o p u la r and t h e b a n k in g i n d u s t r y d e v e lo p e d a r e p u t a t i o n 1 a s b e i n g a d e p r e s s e d i n d u s t r y . T h is was b a s e d on t h e t1 g e n e r a l l y a c c e p t e d a s s u m p tio n t h a t bank s t o c k s a r e o n ly j c o n s e r v a t i v e i n v e s t m e n t s and a r e n o t t o be p u r c h a s e d f o r i grow th* The r e p u t a t i o n o f l a c k o f dynamic g ro w th some- | t i m e s can l e a d t o good b u y in g o p p o r t u n i t i e s i n bank |
